GST Tax Calculator: Tax Calculation under GST, Deductions, and Rates

India is a nation that is emerging towards the greatest days of all time. With the literacy rate up to almost 75% of 132 crores of population, people are now ready to educate themselves and find transparency in everything that the government offers. Recently, GST tax calculators have gained immense popularity due to apparent changes in the GST regime.

The government has notified economic relaxation measures and extended due dates to overcome the impact of the COVID-19 pandemic crisis. The GST Council of India has also implemented several tax calculation changes to relieve the taxpayers of the compliance burden. Each registered person or business registered as a taxpayer is linked with the taxation policy to track funds effectively. This article will walk you through GST rates, deductions, and calculations.

Categories of GST

There are four departments of GST, they are:

UTGST

The Union Territory Goods and Services Tax (UGST) includes taxes that are claimed by the government of union territory.

IGST

The Integrated Goods and Services Tax (IGST) includes taxes claimed by the state government on the inter-state exports and imports department.

CGST

The Central Goods and Services Tax (CGST) includes taxes claimed by India’s central government.

SGST

The State Goods and Services Tax (SGST) includes taxes that are claimed by the State government.

Tax Rates Under GST Regime

The different rates of GST in India are accurately calculated through a GST tax calculator. It includes the following tax rates:

0%: It covers the day to day necessary products such as rice, wheat, dairy products, etc.,
25%: It includes coarse diamonds, various precious gems, etc.,
3%: It has goods like gold, silver, leather, quality jewels, etc.,
5%: It covers the processed food item and fish millets, foot wares below RS.500, etc.,
12%: It includes cell phones, ayurvedic medicines, frozen meat or meat fat, etc.,
18%: It covers books, electrical batteries, trademarked items, hotels and food services, etc.,
28%: It includes luxury services and products such as 5star hotel services, private jet, ATM, alcohol, tobacco, etc.,

Every small-scale business or large-scale business has to consider the GST policies of the country to maintain a smooth and professional financial relationship with the government.

GST Tax Calculator – Tax Calculation Requirements

India is now following a unified single tax structure across all the states. Many people in business found it a worrying factor as it may increase the burden of compliance. On the other hand, the nation has a more significant deal under GST taxes in day-to-day food and personal care products.

These are few essentials that are required to calculate GST Tax. These essentials are usually required to calculate the GST amount on GST tax calculators, such as Imprezz.in.

The original date when the GST annual return is filed.
The product/services your business offers that attracts the RCM (reverse charge mechanism).
The acknowledgment of ITC (Input Tax Credit).
The total tax amount of the taxable month.
The due date of the month of filing your GST returns.
The number of months that you want to calculate your GST tax.

How to Calculate GST Amount

Step – 1

Covert the GST rates (The GST rates – 5%, 12%, 18%, 28% ) into decimals. I.e., divide the percentile by 100.

Example: 12 ÷ 100 = 0.12

Step – 2

Multiply the actual amount of the product, for instance, consider it to be RS. 12,000, multiply the amount with the decimal value of the GST tax percentage.

Example: 12,000 × 0.12 = RS. 1,440

Step – 3

Now, RS. 1,400 becomes the GST amount, excluding the original amount. Further, add the GST tax amount to the actual amount.

Example: 12,000 + 1,440 = RS. 13,440

It is the calculated tax, including the GST of the imaginary product.

How to Calculate Taxable GST

To calculate the taxable GST, follow the step – 1 mentioned above, add “one” to the applicable tax rate and divide the total receipt by that value derived. For instance,

If the tax rate is 12%, then after step – 1, i.e., 0.12 + 1 = 1.12.

Now divide the total receipt amount derived from step – 3, as mentioned above, by 1.12, i.e., 13,440 ÷ 1.12 = RS. 12,000.

You can easily calculate the GST tax through the online GST tax calculator. GST tax calculation at your fingertips – Imprezz.in, the best accounting software in India. Visit Imprezz.in to know more about GST invoices, formats, quotations, and more.

Types of Taxpayers Under the GST Regime

Generally, there are two types of taxpayers under GST.

Type – 1: Taxpayers Registered Under the Normal Scheme

Under this taxation scheme, the taxpayers can claim the Input tax credit and collect the tax through tax invoices. It includes businesses or taxpayers with a specific turnover threshold.

Business with a turnover of up to 5crore.
Business with a turnover of over 5crore and more.

Type – 2: Taxpayer Registered Under the Composition Scheme

Under this taxation scheme, taxpayers are not allowed to claim the input tax credit, nor are they permitted to collect tax through tax invoices. Both schemes have their pros and cons. The aim is to bring up the tax culture to an appreciable facility level.

The nation is slowly trying to adapt the portal services and online form procedures for a better experience. The government is focused on speeding the process related to GST to encourage people to pay their taxes for the nation’s better tomorrow.

Conclusion

GST tax calculation is a no brainer task. Yet, as a taxpayer, be aware of what you follow in terms of calculating your taxes. As a citizen of India, we must pay taxes on time with greater transparency possible. It is the only way we can contribute to the nation and overcome the COVID-19 economic crisis.

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